1. Overview of the Singapore Economy 2000 –GDP = US$92 bil (0.9% of US economy) –Per Capita GNP = US$24,700 (ranked 19th in the world)

2. Structure of the Singapore Economy 2000MANUFACTURING25% CONSTRUCTION6% UTILITES 2% WHOLESALE & RETAIL TRADE 16% HOTELS & RESTAURANTS 3% TRANSPORT & COMMUNICATIONS11% FINANCIAL SERVICES 12% BUSINESS OTHER SERVICES INDUSTRIES 11% INDUSTRIES 11% OWNER OCCUPIED DWELLINGS 3% OTHER GOODS INDUSTRIES, 0.1%

3. Electronics form Bulk of Non-oil Domestic Exports… Total Share of Electronics Products = 66% Chemicals (9%) PCBAs(12%) Disk Drives (13%) Integrated Circuits (18%) PCs & Printers (6%) Others (25%) Other Electronics Products (14%) Telecoms Eqpt (2.8%) (2000)

4. Asia Heavily Dependent on US % (exports to US as % of total exports, 2000)

5. Asia Heavily Dependent on Electronics % (electronics exports as % of total exports, 2000)

6. Hopes of an Imminent Electronics Turnaround Recedes… (world semiconductor sales forecast)

7. No Turnaround Expected in Near-term Singapore’s GDP Growth Forecast (%)

8. But Investments Still Healthy Between Jan-Sep 2001 –$7.75 billion manufacturing investment commitments, which would create 14,800 jobs. –For services, investment totaled $1.38 billion*, which would create 4,600 jobs when realized. On track to meet full year targets of –$9 billion for manufacturing investment commitments –$1.8 billion for services total business spending Total investments expected to generate 15,000 jobs in manufacturing and 7,000 jobs in services *total business spending

9. Second Package on 12 Oct 2001 to Assist Businesses and People Total Impact $11.3 billion –Acceleration of infrastructure projects$3.5 billion –Tax and fee rebates and reductions for businesses and individuals $3.0 billion –New Singapore Shares$2.7 billion –Employment assistance for workers $809 million –Help for the lower income and unemployed$698 million –Property market-related measures$413 million –Assistance to local enterprises$184 million

10. Stages of Development Resource-driven Economy Investment-driven Economy Innovation- driven Economy Singapore? Source: Michael Porter at New Economy Conference Factors of production low cost labor natural resources geographic location Efficiency in producing standard products and services Innovative products and services at the global technology frontier

11. 1 hour 3 hours 4 hours 5 hours 6 hours 7 hours 2 hours 1. Expand our Hinterland: Reaching Out India: population 1 billion Second fasting growing Asian economy China : population 1.26 billion 7% projected growth for next 5 years Japan: population 126.5 million 3rd largest economy Seven hour hinterland 2.8 billion people At least 67 cities and countries 500-800 million people with average US$4,000 annual income

12. Jordan Bolivia Zimbabwe El Salvador Ecuador Venezuela Colombia Costa Rica Egypt Turkey Thailand Poland Mexico Slovakia Czech Republic Portugal Argentina Malaysia Greece Korea Chile Peru Indonesia Philippines India Hungary Brazil Bulgaria Ukraine South Africa Russia China Hong Kong SAR Spain New Zealand Ireland Taiwan Italy Australia Canada Iceland Norway Singapore Austria Finland Israel UK Switzerland Netherlands Belgium Sweden Germany Japan Denmark France US Capacity for innovation (CAP) 1998 GDP per capita Correlation = 0.772 3. Promote Innovation: Innovation Positively Correlated with GDP Source: Global Competitiveness Report 1999

13. 3. Promote Innovation: (R&D activity in Singapore relatively weak) 2 5 11 14 3 21 23 GERD (% of GDP) RSEs per 1000 people